Dr. Steven Klein, Lecturer in Political Theory at Kings College London, very kindly invited me to speak to his class about my 2016 book, The Philosophy of Debt. The class read the book as part of a module on the political economy of finance.
Since writing that book, I have had a few opportunities to rethink the topic, in dialogue with highly intelligent and critical readers. This latest experience was the culmination of this process – a process of transformation, almost akin to an out-of-body experience. I now see my book entirely from the outside. I can look at it, but I can no longer speak from inside of it.
It’s not that I completely disown what I wrote in the book. But I think I wrote it in a certain tone – a tone that, at the time, went a bit beneath my consciousness.
When a new edition of A.J.P. Taylor’s notorious book, The Origins of the Second World War, came out, Taylor wrote a new preface entitled “Second Thoughts”. He felt the need to clarify one point above all: when he used words like “moral” and “legitimacy”, he meant to refer only to the moral feelings of the time he wrote about: “Who am I to say that it was ‘moral’ or ‘immoral’ in the abstract?” When he pronounced the Treaty of Versailles, for instance, to be a moral triumph, he was surprised to face critics who supposed he was personally endorsing it.
I think, though I might not have known it at the time, that I was writing my debt book in the same tone. When, for example, I ended the book writing: “Thought alone can elevate the institution [of debt] into something worthy, generating real obligations” (154), I think that I meant “worthy” and “real” according to a human-made system, whose workings I was tracing throughout the book. It is far beyond me to make pronouncements about what would be truly worthy or which obligations would be truly real. Academic moral philosophers often make such pronouncements, and I am gobsmacked by their presumption. When they then explain that they are simply channeling ‘our’ intuitions – working out what ‘we’ would say in such-and-such a case – I never understand who ‘we’ are: is it each of us as private individuals, or the system we live under, or the way some specific institution thinks (Mary Douglas showed us that institutions do think, after all)? Or is it the ideology of the ruling classes, whether or not Marx was right to say that these are the same as the owners of the means of material production?
I would now say that I meant, and wish I had said, that “worthy” and “real” were meant here according to the operation of a system, built with a particular architecture and expressing in that architecture a certain intention for society: “a mighty maze! but not without a plan”. I was naive in reading this plan off the apparent architecture, but that is, I would now say, because I was largely caught within it.
When I revisit the book, I always get caught on a certain passage:
But our moral instincts run haywire if we then proceed, via the thought that our government’s debt is our debt – the public debt – to the thought that we would rather be rid of this oppressive debt. The ‘oppressive debt’ is money – ours and everyone else’s – and it is absurd to wish to be rid of all money within a monetary capitalist system. To wish for the overthrow of capitalism is another thing entirely (118).
I would now ask “our moral instincts” here to be taken to mean “the instincts bred within the system in question”, and “us” to be a name for that system, which really could have been called by a singular pronoun. A singular name for it is, after all, given in the last sentence of the passage. That sentence now appears to me as it presumably appears to other readers – a flash of promise that burns out as soon as it appears. What did I mean by it? What was the intended force of “another thing entirely”? It has haunted me since I wrote it.
I followed up that glimpse by changing the subject, to a set of what appear to be recommendations to a capitalist government. Capitalism, I proposed, requires capital accumulation, and that in turn – in practice though not in theory – requires a trend towards the growth of public debt. Some economists who read my book missed the force of the italicised phrase. They believed that I overlooked a possibility that sits comfortably within economic logic: the private sector might, through healthy and continued investment, supply what capitalist accumulation demands all on its own with nothing from the State.
But my point was that this process can never in fact be tidy. A large amount of what is, from the point of view of crude material production, rubbish – fictitious capital, financial assets with no purchase on the tangible – builds up in the mechanism. This retains symbolic value and is often indistinguishable from tangible assets. I gave no explanation of what drives its accumulation; I pointed vaguely to a primitive survival, in the mind of the capitalist, from a pre-capitalist age of honour and wergeld. My point was that the corresponding liabilities must go somewhere. They can cycle through private hands but are ultimately not wanted by anybody; in the end they can only be deposited on the public balance sheet. If nobody wants it, everyone must have it – this is a paradox at the heart of the system.
What I was arguing at the time was that the failure to properly flush these paper liabilities all the way through to the public balance sheet gets in the way of the system’s proper operation. It clogs up the financial channels that are meant to carry capital through to its most efficient applications.
Except who says that this is what they are meant to do? And all this concerns financial mechanisms, so why did moralised language appear in my discussion? My answer now would be that moral feelings are very much included within the mechanism – a point that I could have elaborated properly with the help of Joan Robinson’s Economic Philosophy.
But really this opens a door that I couldn’t walk through at the time. I had discussed the tangle into which the notions of debt and duty – one financial and one moral – had got into, and tried to look through the tangle by pointing beyond it, to an institution. What I called the “Hume-Anscombe argument” held, in effect, that obligations to repay debts arise from their instrumentality to sustaining a particular system, and that system, I assumed without much argument, was the system of capitalist production.
“Hume-Anscombe”, I now realise (and in the recent seminar a student’s question cast light on this directly), is something of an oxymoron.
Hume’s discussion of the obligation of promising, which I still believe refers mostly to debt, is cast in purely instrumental terms, accessible to a rational economic agent. It is good for all of us – good in terms of material production – if we generally repay debts when we can. This is all there really is to the obligation.
But Anscombe, as we should know from “Modern Moral Philosophy”, did not think that moral feelings, or moral anything, could arise from instrumental calculations of this sort. The sense of duty, of justice, of obligation, must sink into the soul of the moral agent and become second nature. Otherwise we will never have a moral duty but only a putative, prima facie duty: perhaps I should do this, but let me weigh up the potential consequences for the relevant institutions. And that isn’t a duty at all; it’s a calculation (and it trends towards moral conservatism, Anscombe said, since only borderline cases get scrutinised for calculation; the rest, as a heuristic, follow precedent). I think it’s a tolerable simplification to say that a duty, for Anscombe, has to be religious. We have to resort to the terms of medieval monks to describe its operation in the soul: habitus, virtus, etc.
What I obscured in this oxymoron was again the way in which moral feelings are ground into the mechanism of the economic system I was trying to describe. A debt isn’t a duty, I argued, but a debt’s feeling like a duty is of course part of the operation of the system. Without that, the centrifugal force of special pleading, free-riding, and egoistic calculation in individual cases would simply blow it apart. What I brought upon myself by failing to make this explicit was a lot of suggested reading from those who model human institutions as game-theoretic equilibriums. I have had to spend years confessing my conviction that institutions exist inside human souls and not in the strategic relations between them.
So now we have our moral feelings caught inside the system, and there is no point in trying to judge it from the outside, the way an analytic philosopher might stand astride a political institution like a Colossus and pronounce it Just or Unjust by the terms of some sacred text. What I suppose I was trying to do was critique in a vaguely Marxist vein, finding those points at which the harnessing of moral feeling by the system drove it into collision with itself. And here I was naive – and no less presumptuous than the Rawlsian Colossi. I was naive because I saw the system doing many things and simply marked one of these out as its purpose. I could then declare what ran against that purpose as unworthy or unreal, by an internal not an external criterion. I could recommend reform to the governments whom I marked out as the custodians of the system. I could not recommend overthrowing their system, nor could I recommend against it – so what did I mean by “another thing entirely” in that odd sentence?
Perhaps what I glimpsed even then was that I have no argument for my central assumption, that fostering capitalist production is the purpose of the modern institution of debt. I had tried very hard to show, after all, that it does many other things – in fact it began as something quite different and was only coopted to its industrial purpose in the nineteenth century. It remained true throughout that the creation of unpayable debts stratifies society into castes. Miraculously, it does so with no appeal to any unenlightened theory of cosmic hierarchy. A debtor stands on the same level as a creditor. They are alike human beings with full rights and dignity. If the debtor is a mendicant to the creditor, that is the effect of a voluntary contract – even when people fall into overdraft or arrears they must have somewhere contracted to allow this possibility. If the debtor must remain forever in a debt that grows faster than any available rate of income, that carries over generations, that is a matter of accounting and arithmetic – certainly there is no violation of the metaphysical commitment to human equality.
And so we have a system that permits the stratification of society into castes without invoking anything like Aristotle’s doctrine of natural servitude. This is a stratification and hierarchy in practice and not in theory; it leaves the ideology of the Enlightenment perfectly untouched.
But I portrayed this as a corruption of the institution; I called it abusury and contrasted it with usury, which I (unduly influenced by Catholic orthodoxy) associated with productive lending (in fact I should have included much more in the ‘uncorrupted’ institution – consumption-smoothing, discretionary personal finance, and so on). The question I now ask is: why is what I called abusury not the purpose of the system?
If the social good, the plan for which the system is designed, is material production in a capitalist mode, then abusury certainly gets in the way in some cases. In others, of course, it might help. A high level of personal debt can drive wages above marginal productivity. But then a large pool of agents who are, through the process of stratification described above, barred from accumulating any assets, and thus from progressing beyond subsistence, can function as something like an industrial reserve army. They can hold wages down and profits up (profits from debt-financed sales!). In any case, however, there does not seem to me to be any good reason to think that capitalist production is the purpose of the system. What we see is a mighty maze, and the plan, I continue to believe, can’t be found in economics textbooks. It can only be read, if it can be read at all, in the operation of the system itself.
There is no method for ‘reading a system’ in this grand way, and no metric for the extent to which this or that is its purpose. But going on instinct and common experience, I see no reason to deny that the system seems to be about as good at stratifying as it is at producing. Who am I to say which of those is the real purpose, which should be the proper target for a reformer?
Of course somebody could stand astride the system and pronounce from on high which is the real social good, what is the real human need defining the end towards which the whole thing must be subordinated. The public purpose! This is a golden refrain in the MMT literature I used for purposes of exposition. I was never quite sanguine enough to take it on myself, but I sailed close in my conclusion with “a useful common purpose” (151). My weasel words betray my dim awareness, even then, that in worrying out the public purpose we have nothing to appeal to but moral feeling, and I had just spent pages revealing how moral feeling must be tied up into the system for it to function at all. Any moral ambivalence we might feel about it, any sense of its falling short of its purpose, is produced within it. We must not mistake those jostling feelings for the deliberation of a tribunal judging from the outside.
If we wanted to pronounce a verdict on our society as a whole – to climb out the window I opened a crack when I talked about the “other thing entirely” that a wish to overthrow capitalism might be – we would first need an account of how the moral feelings, or whatever made up the raw materials from which we extracted this verdict, had been exfiltrated from the game in which they must be caught in order for there to be anything to judge at all.
I am very interested in seeing how something like that might be possible. But that project would be properly philosophical. Without it, I think philosophy and debt repel each other in the same way that Hume and Anscombe do, and my attempt at fusion runs against the same negative polarity. I am grateful to everybody who has helped me see this since 2016.